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Progenerative Plans Bone, Business Growth From Revived Acelity Tech

San Antonio — After any acquisition, jobs can be lost, programs are cut, and the business changes its focus. That was true in the years after Kinetic Concepts was acquired by a private equity group led by Apax Partners for more than $6 billion.

The business changed its outward-facing name to Acelity. It turned its attention to its flagship products, such as pumps that help wounds heal and regenerative medicine technologies like tissues that help regrow skin. The company also cut some of its ancillary research programs, leaving that work in limbo.

But one of those halted research programs—a technology to help bones regrow—now has a new home. A San Antonio company called Progenerative Medical announced last week it has licensed the technology from a division of Acelity. (The deal is technically with Kinetic Concepts, which operates as one of a few subsidiaries of Acelity.)

Financial terms weren’t disclosed, but Progenerative’s CEO Jim Poser says that Acelity will receive royalty milestones if Progenerative is able to successfully able to commercialize the device. Though he declined to go into much detail about the deal, Poser says that Acelity is a partner in the development of the technology in part by giving its intellectual property portfolio (including 35 U.S. patents, and more than 200 international ones) to Progenerative as part of the agreement.

Poser has been trying to build a company around this bone growth technology for about three years, ever since Acelity stopped research internally, he says. There’s a good reason he and his Progenerative co-founders, Larry Swain and Neal Vail, are so interested in the device: They developed it at Kinetic Concepts.

Poser ran Kinetic Concepts’ R&D department before the company was taken private in 2011. (He actually left before that for a job in Austin.) Swain, who Poser had previously worked at the University of Texas Health Science Center at San Antonio, handled the primary research into the bone growth technology, which Progenerative is calling Regenn.

Progenerative’s medical device uses a pump system, called a negative-pressure pump, that is part of the wound management division of Acelity’s operations. (The device is what helped turn Kinetic Concepts into a multi-billion dollar company.) This pump is intended help heal ulcers, burns, cuts and gashes that are serious or small, and many other wounds. It creates a vacuum that not only cleans the wound, but also increases fluid flow, such as blood, that helps the wound heal, Acelity says.

Progenerative’s license would allow it to apply that technology to helping bones grow. The company’s researchers believe that the negative-pressure device can similarly stimulate fluid flow in bones. Bones are a porous material, and contain cells in the fluid in those pores that are responsible for helping bones grow, Poser says.

A good example of when those cells get to work stimulating bone growth is after a bone breaks, Poser says. An interstitial fluid within the bones begins circulating, setting off a chain of events in the bone cells that gets them to reform the broken bone, he says. Progenerative believes the negative-pressure system, when targeted at a bone, can similarly activate the fluid and bone cells and start regenerating bone—without breaking any, of course.

“What it’s doing is creating channels of communication within the tissue, which is a fundamental and essential element for the stimulation of repair,” Poser says. “By applying negative pressure in a directed way in bone, we are able to enhance fluid flow and set up an environment that is conducive for bone formation.”

The first indication Progenerative plans to target: spinal fusion. The company already has preclinical data in large animal models (from studies performed at Kinetic Concepts) that shows the device may improve bone formation in fusions of the lower spine. Poser says that Progenerative’s device was able to stimulate bone formation much more quickly than a traditional fusion: in 24 hours compared to a few weeks.

Progenerative will use the version of Acelity’s device that’s currently on the market, though it plans to eventually develop a slightly different version that is intended for shorter-term use, Poser says.

Even with animal studies, the company has a long path ahead of it. Progenerative still needs to test the device in humans, which could begin as soon as 2017, pending the outcome of discussions with the FDA, Poser says. The company likely won’t apply for premarket approval until 2023, he says.

First, the company needs to raise funding. Poser is heading to California next week as a part of his efforts to raise venture capital. He expects he’ll need to raise around $30 million during the next seven years.

Spinal fusion is the company’s initial target, Poser says, because fusion for the lower spine is the most difficult type of bone grafting to effectively perform. The company may pursue other applications, too, such as aiding regrowth of broken bones. Helping strengthen the bones of an osteoporosis patient is a possibility, but because the condition is a systemic one, the device likely couldn’t be used in a preventative manner, Poser says.

Progenerative also can use its technology on cartilage and joints, it says.

David Holley is Xconomy's national correspondent based in Austin, TX. You can reach him at dholley@xconomy.com Follow @xconholley